Regulators facing backlash from various sides

Many individuals and businesses  impacted by the rules of regulatory authorities tend to view them in a negative light.

Regulation, by its nature, implies the presence of controls, restrictions, and impediments to the way people interact and how enterprises go about their business activities.

Those who have been following the American political scene and general news from several industrialised nations, would know there appears to be a growing resistance, at least among the operators of multinational  and other large corporations, to regulations governing their operations.

What is even more interesting is that the meticulously designed messaging from these corporate entities has been successful in convincing consumers for whom the regulations were designed to protect, that somehow regulators are to be loathed. They have fallen for the argument that regulation is inherently an unnecessary obstacle.

If the United States is used as a reference point on the subject of regulation, the post war period between 1940s and the 1970s – the post-World War II era saw the establishment of numerous regulatory agencies, such as the Federal Communications Commission (FCC) which regulates communications in the US including radio, television, cable, satellite, and wire. The FCC protects consumers and regulates entities responsible for critical infrastructure. For example, the agency requires businesses to get permission from customers before sending unsolicited text messages. In an era of spam and bombardments from businesses, unsolicited text messages have become a major nuisance.

The Food and Drug Administration (FDA) is responsible for protecting the public’s health by ensuring the safety, effectiveness, and security of many products and services. These include human health and the environment. It is a massive agency that regulates and monitors food supplies, cosmetics, drugs and medicines, tobacco products and even radiation that is emitted from various products.

Countries like those in the Caribbean and other developing countries rely heavily on the institutional work and guardrails of the FDA to ensure their protection from harmful and fake products and medicines.

Closer to home, we have well-known regulatory authorities such as the Central Bank of Barbados. It monitors what is happening in the financial services sector, more specifically commercial banks and some of the large credit unions.

The Central Bank traditionally leaned heavily on moral suasion but has become a much more activated institution under the leadership of Governor Dr Kevin Greenidge, and has kept overzealous commercial banks from nickel and diming customers with their incessant fees.

In an environment where consumers are watching every dollar, Barbadians have come to rely on the Central Bank to protect them from the heavy hand of the banks.

The Financial Services Commission (FSC) and the Fair Trading Commission (FTC) are also regulators whose roles are integral in protecting consumers and safeguarding their rights.

Given the valuable role of regulatory agencies, why does there appear to be a growing anti-regulation movement? More important, is this a real movement or one manufactured by people whose interests are better served when there is no watchdog?

The regulatory landscape  in the US continues to evolve, with ongoing vigorous debates about the balance between regulation and deregulation. Recent administrations have focused on reducing what was perceived as “regulatory burdens”, while also addressing new challenges such as cybersecurity and climate change.

Though Barbadian consumers are demanding more robust protection from the agencies established to regulate businesses, there is a perception that some regulations have become nuisances and hindrances to the ease of doing business.

The anti-money laundering  (AML) and countering of financing of terrorism (CFT) regulations are accepted as necessary to prevent the spread of organised crime and the use of criminal gains from attaining the cloak of respectability by entering into the banking system.

At the same time, small businesses are being particularly hamstrung by the regulatory environment of the banking sector which they describe as a real humbug. The problem in this case may not be the regulation itself but the mechanism and systems employed by financial institutions that are not eliminating duplication of processes and in some cases using one size boxes to fit all, when customisation is required.